Highlights
- Walmart reports first quarter earnings per share of $0.88, three cents above the company's latest guidance and the First Call consensus estimate.
- Net sales for the quarter were $99.1 billion, an increase of 6 percent.
- Walmart International remains the fastest-growing segment, with net sales up more than 21 percent on a reported basis and almost 9 percent on a constant currency basis.
- Consolidated operating income for the first quarter was $5.8 billion, up more than 10 percent from last year, with a significant contribution from Walmart U.S.
- The company -- all three operating segments and corporate -- leveraged operating expenses for the first quarter.
- Walmart U.S. comparable store sales for the first quarter 13-week period declined 1.4 percent. Sam's Club posted a comparable club sales increase, without fuel, of 0.7 percent.
- The company ended the quarter with return on investment of 19.1 percent for the trailing 12 months ended April 30, 2010, up from 18.7 percent for the comparable period last year. (1)
- The company added 3.6 million square feet of retail selling space this quarter and expects to have a significant number of new store openings in the second and third quarters.

(1) See additional information at the end of the release regarding non-GAAP financial measures.


BENTONVILLE, Ark., May 18, 2010 /PRNewswire via COMTEX/ --

Wal-Mart Stores, Inc. (NYSE: WMT) today reported record first quarter sales and earnings for the period ended April 30, 2010. Net sales for the first quarter of fiscal year 2011 were $99.1 billion, an increase of 6.0 percent from $93.5 billion in the first quarter last year. Net sales for the first quarter included a currency exchange rate benefit of $2.5 billion. Income from continuing operations attributable to Walmart for the quarter increased to $3.3 billion from $3.0 billion in the first quarter last year.

Diluted earnings per share from continuing operations attributable to Walmart ("EPS") for the first quarter of fiscal year 2011 were $0.88, with a benefit of approximately $0.02 from currency exchange rates. This compares to EPS of $0.77 in the first quarter last year.

"Walmart kicked off the fiscal year with record first quarter net sales and earnings, and I'm pleased that earnings exceeded guidance," said Mike Duke, Wal-Mart Stores, Inc. president and chief executive officer. "Our teams around the world delivered on our commitment to the productivity loop. We leveraged operating expenses for the second consecutive quarter and improved the profitability of our business.

"Our customers, particularly in the United States, are still concerned about their personal finances and unemployment, as well as higher fuel prices," Duke added. "Our commitment to reducing prices and managing expenses positions us well across the retail landscape."

Walmart will continue to grow worldwide, with a significant number of store openings expected for the second and third quarters.

The company ended the first quarter with negative free cash flow of approximately $1.6 billion.(1) Free cash flow for the quarter was affected by the lower inventory position at the end of fiscal year 2010. Inventory levels rebounded by the end of the quarter, but still remain at levels in line with the company's improved inventory management. This inventory increase negatively impacted free cash flow by more than $2 billion.

Net Sales

Net sales were as follows (dollars in billions):

Three Months Ended
April 30,
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Percent
2010 2009 Change
---- ---- ------
Net Sales:
Walmart U.S. $62.324 $61.627 1.1%
Walmart International 25.030 20.621 21.4%
Sam's Club 11.743 11.223 4.6%
---
Total Company $99.097 $93.471 6.0%

First quarter Walmart International net sales were $25.0 billion, an increase of 21.4 percent from last year. The increase in Walmart International net sales includes a $2.5 billion positive impact from currency exchange rate fluctuations. On a constant currency basis, Walmart International net sales were up 8.9 percent to $22.5 billion from last year's first quarter results.

Operating Segments Review and U.S. Comparable Store Sales Expectations

Walmart U.S. had operating income of $4.6 billion for the first quarter, up 5.6 percent from last year. For the first quarter, the structural changes implemented earlier this year enabled the business to leverage expenses and deliver strong profitability. Walmart U.S. comparable store sales declined 1.4 percent due to soft customer traffic, partially offset by an increase in average ticket, compared to the first quarter of fiscal year 2010.

Walmart U.S. expects comparable store sales without fuel during the 13-week period from Sat., May 1, through Fri., July 30, 2010 to be negative 2.0 percent to positive one percent, as compared to a 1.5 percent decline for the comparable period last year.

Sam's Club delivered 0.7 percent comparable club sales without fuel for the first quarter. The clubs had strong sales from fresh foods and health and wellness categories, as well as home and apparel. Sam's Club leveraged operating expenses. Operating income grew at a faster rate than sales, increasing 9.2 percent.

Sam's Club expects comparable club sales without fuel during the second quarter 13-week period to be flat, plus or minus one percent, which compares to a 0.6 percent increase without fuel in the comparable period last year.

Both Walmart U.S. and Sam's Club will report comparable sales for the 13-week period on Aug. 17, 2010, when the company reports second quarter results.

As part of an operational realignment, the Walmart units and Sam's Clubs in Puerto Rico moved from the Walmart International segment to the respective Walmart U.S. and Sam's Club segments, effective this fiscal year. Walmart International now consists of the company's operations outside the United States and Puerto Rico.

Walmart International ended the first quarter of fiscal year 2011 with more than $25 billion in net sales, with currency exchange rate fluctuations benefitting sales by $2.5 billion. On a constant currency basis, sales were up 8.9 percent. Mexico, Canada, Brazil and China drove the strong sales performance. On a constant currency basis, first quarter operating income for Walmart International grew faster than sales, despite a $26-million charge, net of insurance, related to the Chilean earthquake. Walmart International leveraged constant currency operating expenses for the fifth consecutive quarter.

Earnings Guidance
For the second quarter of this fiscal year, the company forecasts earnings per share from continuing operations attributable to Walmart to range from $0.93 to $0.98, as compared to $0.88 per share last year. Earnings guidance assumes that currency exchange rates remain at current levels.

"Our guidance is based on our view of the global business. This includes the continuing challenging sales environment in the United States," said Tom Schoewe, executive vice president and chief financial officer. "We remain on track to deliver solid growth, operating leverage and superior returns.

"The company grew sales by 6 percent and added more than 3.6 million square feet of selling space during the first quarter," Schoewe added. "In fact, we are confirming our initial capital spending guidance of $13 billion to $15 billion this year, as we continue to invest in new stores and remodeling our existing stores and clubs."